The costs of the two service departments, maintenance and quality control, that provide support for the production departments are classified as:

Question

Quizplus · Accepted Answer

The costs of service departments that provide support for the production departments are considered indirect costs and are included in the factory overhead. Factory overhead includes all costs that are incurred in the manufacturing process, such as indirect materials, indirect labor, and other indirect expenses that cannot be directly traced to a product or service. Therefore, the costs of maintenance and quality control are classified as factory overhead.

The Costs of the Two Service Departments, Maintenance and Quality